First Growth Funds (ASX: FGF) thought an MoU with YPB Group (ASX: YPB) to create a new digital token was great news for shareholders.

But the lack of clarity in the announcements have led to a hefty grilling from the ASX.

What most bothered the ASX was that they explicitly told shareholders, “YPB has received ASX approval to issue a digital currency token”, when in fact they had not. The company formally retracted the statement on Monday.

First Growth also did not detail the services to be provided to YPB, the fees or legal requirements that needed to be satisfied and how that would happen.

In a statement to the ASX, they say they’d provide strategic advice and receive 20 per cent of all tokens issued by YPB, as well as activation fees and commissions from token sales. They clarified, “there are no legal requirements for this service”.

In relation to the separate agreement between First Growth’s subsidiary LINCD and YPB, it was again about consulting advice but no fees were payable nor were there legal requirements.

The ASX asked for the board minutes from the LINCD meeting approving the execution of the MOU, but First Growth admitted there were none.

 

 

The ASX reminded First Growth of Listing Rule 12.5 which states, “an entity’s structure and operations must be appropriate for a listed entity”.

First Growth told the ASX they not sold any tokens, blaming an illiquid market, but said they will seek to sell tokens “when there is sufficient liquidity available”.

The stock has been suspended since April 4 and last traded at 0.009 cents after being as high as 4 cents in January 2018.

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